Correlation Between Dodge Cox and Blackrock Lifepath
Can any of the company-specific risk be diversified away by investing in both Dodge Cox and Blackrock Lifepath at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Dodge Cox and Blackrock Lifepath into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dodge International Stock and Blackrock Lifepath Idx, you can compare the effects of market volatilities on Dodge Cox and Blackrock Lifepath and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Dodge Cox with a short position of Blackrock Lifepath. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dodge Cox and Blackrock Lifepath.
Diversification Opportunities for Dodge Cox and Blackrock Lifepath
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dodge and Blackrock is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Dodge International Stock and Blackrock Lifepath Idx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Lifepath Idx and Dodge Cox is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Dodge International Stock are associated (or correlated) with Blackrock Lifepath. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Lifepath Idx has no effect on the direction of Dodge Cox i.e., Dodge Cox and Blackrock Lifepath go up and down completely randomly.
Pair Corralation between Dodge Cox and Blackrock Lifepath
Assuming the 90 days horizon Dodge International Stock is expected to under-perform the Blackrock Lifepath. In addition to that, Dodge Cox is 2.11 times more volatile than Blackrock Lifepath Idx. It trades about -0.27 of its total potential returns per unit of risk. Blackrock Lifepath Idx is currently generating about 0.04 per unit of volatility. If you would invest 1,400 in Blackrock Lifepath Idx on August 27, 2024 and sell it today you would earn a total of 4.00 from holding Blackrock Lifepath Idx or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dodge International Stock vs. Blackrock Lifepath Idx
Performance |
| Timeline |
| Dodge International Stock |
| Blackrock Lifepath Idx |
Dodge Cox and Blackrock Lifepath Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dodge Cox and Blackrock Lifepath
The main advantage of trading using opposite Dodge Cox and Blackrock Lifepath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dodge Cox position performs unexpectedly, Blackrock Lifepath can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Blackrock Lifepath will offset losses from the drop in Blackrock Lifepath's long position.| Dodge Cox vs. Dodge Stock Fund | Dodge Cox vs. Dodge Income Fund | Dodge Cox vs. Dodge Balanced Fund | Dodge Cox vs. The Fairholme Fund |
| Blackrock Lifepath vs. The Hartford Equity | Blackrock Lifepath vs. Gmo Global Equity | Blackrock Lifepath vs. Vanguard Telecommunication Services | Blackrock Lifepath vs. Dodge International Stock |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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